The health sector was by far the most constructive segment up until last summer.

However, it strongly broke down in August, and had a hard time recovering, as seen on the XLV chart.

The lows of October 2015 and February 2016 appeared to coincide with meaningful reversals and ‘washout’ bottoms.

We have selected 3 stocks in the health sector which deserve the attention of investors.

First, Horizon Pharma, a $2.3B market cap drug company with a $0.08 EPS and future earnings of $2.64 is attempting to break out after a meaningful correction. The stock managed to stay above the $13 support area. Watch $16.50 for a confirmed breakout.

Second, Advaxis, a small cap with a $279M market cap, has a similar setup as Horizon Pharma. We are not very pleased with the low trading volume. If the stock would break out, we want to see more interest as a healthy sign for investors to get on board.

Last, Theratechnologies, a small cap biotech company based in Canada, is continuing a huge rally which started in March of this year. As the stock is trying to break through all-time highs, it is trending outside its consolidation pattern, signaling it is an attractive buy candidate.